If you were to sell your healthy hen, how much will you ask for?
100 bucks?
That's the approximate going market rate of a broiler!
But considering that a healthy hen can lay up to one egg per day (5 to 7 per week),
and considering that a hen has a productive life of about 70 weeks,
a hen can give you approx. 400-500 eggs in a year and a half!
@3 bucks per egg, that means a hen can give you a revenue of upto 1500 bucks before fetching you 100 more bucks in the end. (Though I request you to spare her life after she has already fetched you 1500/-)
So, now what will you ask for as the price of the hen?
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Similarly, the price of a business is not the price of the net assets in the business but the cashflow it can generate in future!
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If you can somehow estimate net profits from a business for the next 4 years,
then add the net current assets of the company to that figure,
and then divide that figure with the total number of shares
you will find an estimated fair futuristic value of the share
in the current scenario!
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